The IRS has reminded taxpayers that time is running out for them to claim refunds for tax year 2020.
The reminder says that May 17 is the deadline for claiming those refunds. People who want to claim tax refund for 2020 need to file their 2020 return by May 17, 2024.
The three-year window closes later than usual this year
If a refund is unclaimed, that is because the taxpayer did not file a tax return. As the IRS put it, 2020 refunds “remain unclaimed because people haven’t filed their 2020 tax returns yet.”
There is a three-year window for filing returns to claim refunds, meaning that people usually have three years to file and claim. The normal filing deadline is April 15, the typical tax deadline. So, ordinarily, someone expecting a refund for tax year 20X0 would need to file a 20X0 year return and claim the refund by April 15, 20X4.
But the IRS postponed the tax deadline for 2020 returns because of the COVID-19 pandemic. The tax deadline for 2020 returns was pushed back to May 17, 2021, instead of April 15, 2021. And, because of that, the three-year window for claiming a 2020 refund is now pushed back to May 17, 2024.
“There’s money remaining on the table”
The IRS thinks almost 940,000 Americans have unclaimed refunds for tax year 2020 and that those unclaimed refunds total more than $1 billion. The median amount of unclaimed 2020 refunds is probably around $932.
The unusual and stressful situations people faced in 2020 and 2021 may have led many to forget about their 2020 tax returns and refunds, the IRS believes.
IRS Commissioner Danny Werfel said, “There’s money remaining on the table for hundreds of thousands of people who haven’t filed 2020 tax returns.” “We want taxpayers to claim these refunds,” he added, “but time is running out for people who may have overlooked or forgotten about these refunds.”
The IRS cautions taxpayers, though, that it may hold their 2020 refunds if they have not filed returns for 2021 and 2022, or if they owe money to the IRS or a state agency.
The Earned Income Tax Credit may need to be claimed too
It’s not just tax refunds for 2020 that are going unclaimed. The IRS wants people to remember the Earned Income Tax Credit (EITC) as well. For 2020, the EITC can be worth up to $6,600 for low- and moderate-income workers.
To claim either a 2020 tax refund or a 2020 EITC, however, people need to file soon. The deadline is pushed back by a month this year—but only a month.
